CITY

Parks office unveils contract terms with new golf manager, Landscapes Unlimited

Joe Sneve
Argus Leader

City Hall will pay an annual fee and share profits with its new public golf course management company, based on a contract that awaits approval of the Sioux Falls City Council.

After a selection committee earlier this fall picked Landscapes Unlimited to operate Sioux Falls' three public golf courses, the city's finance department and executives with the Nebraska-based management firm began to hash out the terms of a 5-year contract.

The recommended terms were unveiled before the Sioux Falls Parks and Recreation Board and during the City Council's 4 o'clock information meeting Tuesday. 

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"It’s been quite a process of negotiating this agreement," Parks Director Don Kearney said.

City Hall and Landscapes Unlimited have agreed to an annual management fee of $75,000 with an incentive fee of 11 percent. In other words, if operations at Kuehn Park, Elmwood and Prairie Green golf course turn a profit, the management company will receive 11 percent of those funds while the remaining 89 percent will revert to the city.

The base fee of $75,000 would increase 3 percent each year during the length of the contract.

Also included in the contract approved unanimously for recommendation by the Parks Board outlines responsibilities for Landscapes Unlimited, which includes fully maintaining and operating the courses.

Green fees paid by golfers to use the course would be unchanged under the contract - at least for one year.

"When we transition into a new property we try to do so gradually, not create too much turmoil," said Tom Everett, Landscapes Unlimited president. "So we felt the best course of action was to stay the current course and give us an opportunity to further evaluate the market."

If a rate change is deemed prudent by Landscapes Unlimited in subsequent years of the contract, it would make that request to the Parks Board, which has the final say over green fees.

"It essentially gives us an opportunity to get a season under our belt," Everett said.

Landscapes Unlimited would also be responsible for obtaining the golf course equipment like mowers, golf carts and GPS technology - though the city would pay for and own those assets once the contract expires.

The city's existing contract with Dakota Golf Management — it ends Dec. 31 — provides for an annual fee of $43,000. Dakota Golf Management also owns all of golf course equipment.

Dakota Golf Management President Tom Jansa said he's optimistic a deal can be reached between Landscapes Unlimited, the city and his company to transfer those assets. But if one can't be reached, the city could be looking at hundreds of thousands of dollars of expenses beyond what's laid out in the contract.

"It's not just pieces of equipment," Jansa said. "We own the tools, the supplies, the lifts, the hydraulic jacks, the office equipment. its pretty much bare walls if they want to go somewhere else."

When Landscapes Unlimited was selected in October, Everett said his company had a desire to retain Dakota Golf Management employees to help smooth the transition. Those details have yet to be worked out, though.

Jansa said unless an amicable deal can be reached regarding the golf course assets Dakota Golf Management owns, that might not happen.

Councilor Marshall Selberg, who served on the selection committee that chose Landscapes Unlimited over four other companies vying for the contract, said not having Jansa and his team on board would be a major blow to the city's golf system.

"Everybody in the group really felt strongly that one of the perks of this deal was keeping (Dakota Golf Management), hopefully, involved and using that expertise ... and then team up," he said. "That's where we really thought we had something here."

The City Council will be asked to formally approve the contract with Landscapes Unlimited at its meeting Dec. 19.